I have found a program for people with bad computers, you can easily watch 720p and 1080p mkv videos with much lower CPU usage + smoother playback.
It's called
Mirillis Splash Pro. I haven't tried the free version (Lite), but the Pro version works perfectly.
http://mirillis.com/en/So, basically I took some 1080p videos I have in my PC and looked how much percentage of the CPU they are using while playing.
I took 'WH - Onslaught' as an example.
Here is the CPU usage for every player I've tried:
BSplayer - 28-40%
Windows Media Player - 30%-42%
VLC - 25%-32%
Splash Pro - 3%-8%
Hope it helps. I'm pretty sure you can watch 720p vids on pentium III with this lol.